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"No Inflation" Friday: The Dollar Has Lost 83.3% Against...

Tyler Durden's picture




 

Submitted by Simon Black of Sovereign Man blog,

I needed a caffeine jolt late this morning after the long journey up from South America.

And while I’m generally averse to aspartame, high fructose corn syrup, and other government-sanctioned poisons, I did briefly consider a hit of Coca Cola as I walked past a vending machine on my way out of a grocery store.

Then I saw the price.

To give you some quick background, this was the same grocery store my mother used to shop at when I was a kid. And if I was really lucky, we’d stop for a can of coke on the way out– 25 cents back then.

Fast forward to today–. I’m a grown man of 35 now instead of a 9-year old kid. And while the store has changed hands a few times, there’s still vending machine near the entrance.

Same coke, same 12 ounces (though now in a plastic bottle instead of an aluminium can).

Price today? $1.50. [note, this is the vending machine price, not grocery store price.]

Put another way, $1 would have bought me 48 ounces of Coca Cola 26 years ago. Today that same dollar buys me just 8 ounces.

This means that the dollar has lost 83.3% of its value against Coca Cola over the past three decades, averaging roughly 6.6% inflation per year.

Some readers may remember the price of Coca Cola being just 5c back in the early 1950s (for a 6.5oz glass)… meaning the US dollar has lost 93.8% against Coca Cola over the past six decades.

Now, we are taught from the time we are children that ‘a little inflation is good…’

And when central bankers tell us they’re targeting an inflation rate of 2% to 3%, that certainly doesn’t seem so bad. 2% is practically just a rounding error. But bear in mind a few things–

1) An inflation rate of 2% is not price stability.

As Jim Rickards frequently points out, even with just 2% inflation, a currency loses over 75% of its value during an average lifespan. This can hardly be considered monetary stablilty.

And this practice of gradually plundering people’s purchasing power over time is incredibly deceitful.

2) Even if, they rarely meet their target.

As this case shows, 6.6% certainly ain’t 2%. The official statistics and research papers may say 2%. Reality is much different.

3) Wages often don’t keep up.

According to the US Labor Department, the median weekly wage back in 1988 was $382… or roughly 18,336 ounces of Coca Cola.

Today the median weekly wage is $831.40… or just 6,651.20 ounces.

So as measured in Coca Cola, the average wage in the Land of the Free has declined by 11,684 ounces per week– a 63.7% decline over the last three decades.

You can make a similar calculation denominated in Snickers bars, gallons of gas, etc.

If you have a big picture, long-term view, it’s clear that standard of living is falling.

Some readers may remember decades ago– a single parent could go out and, even with a blue collar job, comfortably support a growing family.

Today, dual income households struggle to keep their heads above water. This is the long-term plunder of inflation.

And just to give you a reminder of what things used to cost, I’ve pulled a page from the March 7, 1988 edition of the Bryan Times of Bryan, OH: 26-years ago today.

inflation federal reserve No inflation Friday: the dollar has lost 83.3% against...

You can scroll through the paper and note the prices:

25c for a dozen eggs. 69c for a loaf of bread. 49c for a pound of Chicken. A brand new Mustang LX for just $9203.

That’s the Federal Reserve for you. 100 years of monetary destruction and counting.

 

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Fri, 03/07/2014 - 18:21 | 4523095 tahoebumsmith
tahoebumsmith's picture

How about the gallon of milk I bought last night for $4.99?

Fri, 03/07/2014 - 18:23 | 4523103 James_Cole
Fri, 03/07/2014 - 18:31 | 4523140 negative rates
negative rates's picture

No wonder the cost, the water comes from Africa.

Fri, 03/07/2014 - 18:42 | 4523179 The Gooch
The Gooch's picture

That shit will kill you quicker than bourbon.

Fri, 03/07/2014 - 18:49 | 4523209 lordylord
lordylord's picture

Read Ron Paul's End the Fed.  Incredibly written and easy to understand.  INFLATION IS THE MOST DEVIOUS TAX OF THEM ALL!  Too bad your average American can't understand that.

Fri, 03/07/2014 - 19:00 | 4523252 fonestar
fonestar's picture

How many satoshis was that in 1988?  fonestar does not compute.

Fri, 03/07/2014 - 19:29 | 4523324 AmericasCicero
AmericasCicero's picture

you know what? - ill upvote cause I still laughed.

Fri, 03/07/2014 - 19:40 | 4523364 National Blessing
National Blessing's picture

Read my lips.  No new taxes.  Bitches.

Fri, 03/07/2014 - 19:57 | 4523412 tmosley
tmosley's picture

Sorry, the ZH comment section is now firmly pro-Fed.

You'll have to sell your wares elsewhere, Simon.

Fri, 03/07/2014 - 20:21 | 4523470 Clowns on Acid
Clowns on Acid's picture

Read Satoshi's lips - No new BitCoin

Fri, 03/07/2014 - 20:23 | 4523474 fonestar
fonestar's picture

+100

Fri, 03/07/2014 - 19:01 | 4523255 NotApplicable
NotApplicable's picture

WARNING!

SOCK-PUPPETS HAVE INVADED THIS THREAD.

details below...

Fri, 03/07/2014 - 19:29 | 4523321 666
666's picture

When I was a kid, Coke from a vending machine came in a glass bottle, tasted real good, and only cost 10 cents. I don't drink any soda anymore primarily because they taste like adulterated puke.

Fri, 03/07/2014 - 19:33 | 4523339 LetThemEatRand
LetThemEatRand's picture

Have you tried puke classic?  

Fri, 03/07/2014 - 19:53 | 4523402 The Gooch
The Gooch's picture

PUKE II.

The grand deception.

 

Fri, 03/07/2014 - 20:06 | 4523443 Greenskeeper_Carl
Greenskeeper_Carl's picture

i occasionally really enjoy a coke. Go to the ethnic foods section of your local grocery store and by the glass bottles of coke or pepsi that say 'hecho in mexico' on them. No high fructose corn syrup, made with real sugar. Still not good for you, but it is delicious. and you pay about twice as much for it. I spent a year in the middle east, a good while ago, mostly on a boat out of bahrain, and everyone liked the 'hajji coke' better, and got pissed off when the cook bought american made coke to the boat, becuase the hajji coke was made with real sugar too. Everyone wanted the coke with arabic writting on the can, which still had the old style peal off top. True story, I noticed how much better it tasted, looked into the whole sugar/ high fructose corn syrup/ sugar tarriffs thing, and pretty much stopped drinking soda when I got back, aside from the occasional mexican kind

Sat, 03/08/2014 - 00:14 | 4524163 Curiously_Crazy
Curiously_Crazy's picture

The US really seems to be an exception in terms of it's using high fructose corn syrup. Everywhere I've been (which granted only consists of several countries) always uses 'real sugar' - in fact it's sort of funny seeing it written in that way because everyone I know couldn't concieve of anything but 'real sugar' (the aspartame crowd aside).

Fri, 03/07/2014 - 18:47 | 4523210 NotApplicable
NotApplicable's picture

In other news, I learned that Simon is only 35. That explains a lot, and perhaps I'll give him a little slack.

Fri, 03/07/2014 - 19:04 | 4523261 J S Bach
J S Bach's picture

Inflation is a major way the legal counterfeiters (The Fed) get their interest on debt-based currency.  It's simply an insidious hidden tax which affects the little guy more than anyone else.  As long as we have this usurious system, inflation will be ever-present.

Fri, 03/07/2014 - 22:30 | 4523880 Portuguese Revo...
Portuguese Revolutionary's picture

+10000000

I just wonder, Americans are always thinking "What would Jesus do?" and I think they don't remember the story about how He kicked the money-changers' asses...

Sat, 03/08/2014 - 09:16 | 4524656 Badabing
Badabing's picture

I can't find T shirts that have a pocket anymore, get less for more!!

Fri, 03/07/2014 - 19:05 | 4523266 fonestar
fonestar's picture

fonestar's PAL is only 35 but he is very wise.

Fri, 03/07/2014 - 18:48 | 4523212 johnQpublic
johnQpublic's picture

notice bananas are the only thing that has stayed relatively constant

3lb for .99 then, .39 a pound on sale at wegmans now

they sell them at a loss according to the produce manager

Fri, 03/07/2014 - 20:54 | 4523591 cossack55
cossack55's picture

Since the plutonium/uranium accident at WIPP in NM (ongoing), they are now disposing of radioactive waste in bananas.  

Sat, 03/08/2014 - 02:22 | 4524367 Dr. Sandi
Dr. Sandi's picture

I thought that's what fracking was for.

Sat, 03/08/2014 - 14:26 | 4525285 A Nanny Moose
A Nanny Moose's picture

Bananas are plentiful in this Republic.

Fri, 03/07/2014 - 18:34 | 4523149 12ToothAssassin
12ToothAssassin's picture

Raw milk is $9.99 for a half gallon.

Fri, 03/07/2014 - 18:45 | 4523195 Dr. Destructo
Dr. Destructo's picture

A dozen free-range eggs directly from the farm costs $10 here.

Sat, 03/08/2014 - 01:03 | 4524283 Dr. Sandi
Dr. Sandi's picture

Sitting here munching my Lay's Sour Cream & Onion potato chips. Looking at the 1 LB. bag which is now 9 1/2 ounces. Remembering when same brand was 69 cents and the 1 LB. bag had...

16 ounces of chips. Of course, that was 1960. They were Lay's New Era Potato Chips of Detroit, recently acquired by Lay's. If I remember, that was before their liason with the Frito Bandito.

This rounds up to $7.23 a pound vs. $.69 a pound. That's 54 years or so. But this is friggin potato chips, the basis of any well rounded Yankee diet. That's only 10.4x the old price.

And I really think it's a much closer measure of real inflation than a lot of the crap the boyz are feeding us.

 

Fri, 03/07/2014 - 18:35 | 4523154 MeMadMax
MeMadMax's picture

Yes, prices are rising, but there are anomalies:

Last night I bought 4, 2 liter bottles of pepsi for 79cents each.

This applies to coke as well. 

It depends on which bottle you buy and where you buy it as far as soda is concerned.

 

I still remember the days when gas was 89 cents a gallon, and I'm only 32...

Everytime I fill up I get pissed.... Makes for a stressful day... >_>

 

Fri, 03/07/2014 - 20:17 | 4523462 Greenskeeper_Carl
Greenskeeper_Carl's picture

nothing like saying "lets go over there honey, gas is only 319 a gallon....ah fuck

Sat, 03/08/2014 - 14:46 | 4525334 frenzic
frenzic's picture

You have room to spare. We are @ $9.712/gal for the good stuff.
http://www.wolframalpha.com/input/?i=1.849+euros+per+liter+in+dollars+pe...

Fri, 03/07/2014 - 20:41 | 4523548 AlaricBalth
AlaricBalth's picture

I can recall .29 cents at the Sinclair station in central Florida circa 1960's.
On weekends Dad would would take us for a Sunday drive. We would just cruise amongst the lakes and orange groves in his rag top T-Bird around pre Disney Orlando. After stopping for ice cream we would make it home on time to catch Batman on TV, in color.

Fri, 03/07/2014 - 18:56 | 4523240 mophead
mophead's picture

"Probably has nothing to do with this"

That's not it. In the US we pay farmers to kill their cows. Reason? Too much milk production. We burn corn in cars. Excuse: environmentalism. Real reason: over production. When there are more goods chasing fewer buyers, what happens? We get deflation. In reality, we should experience deflation, year after year due to increases in productivity, which is made possible through innovation, etc. The Fed exists to not let that happen.

 

Fri, 03/07/2014 - 20:15 | 4523457 Greenskeeper_Carl
Greenskeeper_Carl's picture

that is a very interesting perspective. Never heard that suggested before. I have always thought about how stupid it was to put corn in our gasoline, which serves to make corn more expensive, which drives up food(especially meat) prices across the board, and all for the whole climate change farce, even though it has been known for a while now this doesnt actually help. Things that make you go hmmm. Can't have deflation, though. It may make your dollar worth more, but it makes the govt debt less easy to service, which might as well mean: Fuck you, serf

Sat, 03/08/2014 - 00:59 | 4524277 WOAR
WOAR's picture

Here's a demotivator shirt waiting to happen:

 

Banking

Go fuck your serf.

Fri, 03/07/2014 - 20:42 | 4523556 Clycntct
Clycntct's picture

"We burn corn"

Exploding my head with that thought.

 It's not only that but if at every turn we see any issue the .gov promos we see abject failure.

It's painful to have been part of this country.

Fri, 03/07/2014 - 20:36 | 4523525 Rikeska
Rikeska's picture

Do tell.

Wed, 03/12/2014 - 19:13 | 4540790 rickv404
rickv404's picture

 

No, population increase certainly has nothing to do with it. On the contrary. If we had zero inflation (meanng a gold standard) you'd be paying LESS for everything than you were in 1988, and an increase in population would help make that possible, in fact. That's the beauty of capitalism; the more people you have, the greater your economy. No, you are paying more because of  - Medicare Part D, No Child Left Behind, TARP and other bailouts, Bush and Obama's "stimulus" packages, mortgage deduction, Cash for Clunkers, dramatic increase in food stamp expenditures, unemployment compensation and extensions of unemployment compensation, Hurricane Sandy pork, Farm bill, wars in the Middle East, and, worst of all, Obamacare, which is only getting started. I'm sure I've left something out, but how do you think all these recent increases in government spending are being financed? 

 

Fri, 03/07/2014 - 18:25 | 4523110 northerngirl
northerngirl's picture

How about a pound of hamburger?

Fri, 03/07/2014 - 18:35 | 4523157 McMolotov
McMolotov's picture

How about a pound of soylent green?

Fri, 03/07/2014 - 18:46 | 4523201 Dr. Destructo
Dr. Destructo's picture

A pound of flesh plz.

Fri, 03/07/2014 - 18:55 | 4523239 negative rates
negative rates's picture

Eye don't know, that might not be enough, she's been a bad, bad girl according to Santa.

Fri, 03/07/2014 - 20:00 | 4523421 tmosley
tmosley's picture

I actually started eating Soylent.  It's pretty good.

http://robrhinehart.com/?p=298

Fri, 03/07/2014 - 18:28 | 4523120 Cattender
Cattender's picture

Gas was UNDER $3 a Gallon here at X-Mas NOW $3.79 Here in Michigan.. the RECOVERY Continues...

Fri, 03/07/2014 - 18:43 | 4523186 The Gooch
The Gooch's picture

You were conditioned to think $3 was fair.

Fri, 03/07/2014 - 19:31 | 4523331 AmericasCicero
AmericasCicero's picture

Im early 20's and EVEN I remember under $2

Fri, 03/07/2014 - 18:31 | 4523133 NOTaREALmerican
NOTaREALmerican's picture

Re:  How about the gallon of milk I bought last night for $4.99?

Oh sure, but that's offset by the automotive bling you can buy with 3% autoloans.

I'd like to see Simon Black go back in time and find when a member of the Trash Class could buy the equivalent to the Chrysler 300, with tinted windows, extra loud exhaust, and oversized tires to prove what a large dick the driver has.

Who needs cheap milk when you've got a Chrysler 300.

Fri, 03/07/2014 - 19:15 | 4523288 FinalCollapse
FinalCollapse's picture

The next model will be Chrysler 30,000.

Fri, 03/07/2014 - 20:01 | 4523425 tmosley
tmosley's picture

6000 SUX, you mean.

Sat, 03/08/2014 - 13:41 | 4525163 Dave Thomas
Dave Thomas's picture

I'd buy that for a dollar!

Fri, 03/07/2014 - 18:34 | 4523150 negative rates
negative rates's picture

Traders don't really eat much, so the cost of food is of very little interest. Now making money off of food is something they have to do to support the habit of their consumption, ergo the price inflation without representation.

Sat, 03/08/2014 - 10:16 | 4524724 TeMpTeK
TeMpTeK's picture

I pay 4.29 for a 1/2 gallon of 2% organic.......apparently its more expensive to not put chemicals in it... 

Fri, 03/07/2014 - 18:22 | 4523100 Zymurguy
Zymurguy's picture

Expansion of fiat currency, keynesian economic principles, fractional reserve lending and other debt based policies... leads to loss of purchasing power of said currency - response:  loosen regulations and lower tarrifs allowing foreign manufactures to import lower cost goods and allow domestic manufacturers the ability to source labor overseas thus allowing "some" domestic citizens/consumers to maintain a standard of living while others suffer horribly into poverty due to lack of good paying jobs.

Welcome to 2014

Fri, 03/07/2014 - 18:25 | 4523106 Occams_Chainsaw
Occams_Chainsaw's picture

Even the hookers are charging more now and added an ACA surcharge.  Bitches...

Fri, 03/07/2014 - 18:46 | 4523192 ShrNfr
ShrNfr's picture

You mean the two "working class girls" that got photographed with Bill Clinton at a charity fundraiser?

 

http://blogs.rgj.com/politics/2014/03/06/bill-clinton-poses-with-bunny-r...

Fri, 03/07/2014 - 18:26 | 4523112 Stoploss
Stoploss's picture

Holy shit!! Outta my way, i gots to put my paper in an overseas bank!

 

.     .

  0

Fri, 03/07/2014 - 18:26 | 4523113 NOTaREALmerican
NOTaREALmerican's picture

Without inflation people wouldn't take the risks necessary to enrich the Elysium Class.

And without the Elysium Class who would lead this great-n-glorious nation?

Fri, 03/07/2014 - 18:30 | 4523131 Doubleguns
Doubleguns's picture

A commoner with common sense, I guess. I think we might be able to struggle through it though. 

Fri, 03/07/2014 - 18:27 | 4523117 erkme73
erkme73's picture

That same ad shows Pepsi 2 liter for 99 cents.  I see that on sale at Walmart quite regulary.  Bananas, 3lbs for $.99 (or 33 cents/lb) is also not drastically different.  Walmart has banans for 39 cents/lb. often.

I'm not at all disagreeing with the authors assumptions.  But if you're going to look at the extremes (49 cents for a dozen eggs), then to be fair, there are still quite a few items that really have not deviated much.   

Fri, 03/07/2014 - 18:31 | 4523138 fijisailor
fijisailor's picture

Exactly my thoughts when looking at the prices.

Fri, 03/07/2014 - 18:50 | 4523203 NotApplicable
NotApplicable's picture

Thing is, that chicken breast wasn't injected with water back then. Nor was everything else made with posion substitutes, such as good ole aspartame, etc...

Oh, and if you bought a package of "fresh ground beef" it wasn't pink on the outside and brown on the inside.

Substitution effect is well in play here.

Fri, 03/07/2014 - 19:44 | 4523378 Jlasoon
Jlasoon's picture

Exactly, price is one thing, but even I can remember the purity of the products sold. Everything taste like shit now. Let's see what happens when you compare these products to those of Whole Paycheck. How cheap are bananas at Whole Foods? How about the eggs? What about bread? Meat? That's what needs to be compared. The quality of the product has deteriorated drastically over the years due to INFLATION.  

At least we can all buy a 50 inch TV to watch dear leader for $400. 

Fri, 03/07/2014 - 18:41 | 4523141 skwid vacuous
skwid vacuous's picture

Pepsi and bananas, breakfast of champions... in Obama-merika

Fri, 03/07/2014 - 18:33 | 4523145 erkme73
erkme73's picture

Of course, I guess one could argue, that the reason bananas are still 30-ish cents per pound is because of more efficient harvesting, distribution, etc.  And if it weren't for the 6%/yr inflation, bananas would be a nickle a pound today.  So yeah, still see the author's point.

Fri, 03/07/2014 - 18:37 | 4523162 skwid vacuous
skwid vacuous's picture

If we had to grow them here they would be $2/lb... thank god for those "more efficient" mestizos

Fri, 03/07/2014 - 18:47 | 4523206 Big Brother
Big Brother's picture

Exactly.  You're supposed to see good deflation with productivity and technological improvements (witness post-civil war to 1913).  So yeah, a nickel a bushel sounds about right.

I wonder who ate up all that excess productivity?  Something about the Mike Maloney clip a few pages back...

Fri, 03/07/2014 - 19:27 | 4523316 TheObsoleteMan
TheObsoleteMan's picture

Bananas come from where? Central america. What is their currency valued to the US$? There is your reason.

Fri, 03/07/2014 - 18:28 | 4523121 obj089
obj089's picture

wages typically do keep up as do interest rates. so if you don't have your money under your mattress then 2% inflation IS a good thing because it lets the central bank run monetary policy in an effective manner. this is a stupid post. 

Fri, 03/07/2014 - 18:34 | 4523151 AlaricBalth
AlaricBalth's picture

Uh....no.

This FRED chart compares the growth of inflation (red line) and real wages (blue line). Since going off the Gold Standard completely in 1971, inflation has skyrocketed and is beginning to outpace the growth of real wages.

http://www.intellectualtakeout.org/sites/www.intellectualtakeout.org/fil...

Fri, 03/07/2014 - 18:36 | 4523161 Doubleguns
Doubleguns's picture

Thank you Alaric. He is not from this planet I guess. 

Fri, 03/07/2014 - 18:55 | 4523238 NotApplicable
NotApplicable's picture

Cuz "he" isn't even real. Just another sponsored sock-puppet.

Fri, 03/07/2014 - 18:36 | 4523155 Doubleguns
Doubleguns's picture

OBJ089, Have you been in this recession. Hello McFly!!! Neither wages nor interest has kept up with shit. How does ZIRP keep up with anything. Pull your head out of your glutes. 

Fri, 03/07/2014 - 18:38 | 4523167 NOTaREALmerican
NOTaREALmerican's picture

Re;  wages typically do keep up as do interest rates

The wages of the Elysium Class definitly keep up with inflation.   Primarily because when the Trash Class realizes they can't keep their money under the mattress they are forced to give it to members of the Elysium Class who (un) "invest it" for them after taking an "investment fee".

Fri, 03/07/2014 - 18:47 | 4523207 negative rates
negative rates's picture

Sure and all that's left to be paid are the consequences bitches.

Fri, 03/07/2014 - 18:43 | 4523181 skwid vacuous
skwid vacuous's picture

Krudlow?? welcome to ZH!

Fri, 03/07/2014 - 18:54 | 4523235 NotApplicable
NotApplicable's picture

Well, as a worthless fucking sock-puppet, you should know all about stupid posts.

An almost three year old account with only three posts starting in January. And you'd think none of us would check?

WE NEED BETTER TROLLS!!!!!!

Fri, 03/07/2014 - 18:57 | 4523245 Big Brother
Big Brother's picture

Another fallacy of Kenysian economics; that which is "sticky wages" because ALLEGEDLY the general population begins to panic if they see their nominal wages drop while unaware of a deflationary environment where the money saved appreciates and can buy the corresponding deflated consumbles and discretionaries.  When real inflation rates as outlined in this article (because the measured inflation of a common consumable like coke is real inflation) exceeds real wage growth, then there exists a central bank monetary policy ran in an INeffective manner.  This is a GOOD post.

 

Fri, 03/07/2014 - 18:29 | 4523124 mumbo_jumbo
mumbo_jumbo's picture

in 1988 i used to make $80K a year......which i still do now.

we're fucked as a country as there's only one class or 'club' that matters and you and i ain't in it.

Fri, 03/07/2014 - 18:33 | 4523146 NOTaREALmerican
NOTaREALmerican's picture

Competition is for the Trash Class.   The Elysium Class buys politicians to ensure they don't complete unless they want some exersize. 

Survival of the fittest, bitchez!

Fri, 03/07/2014 - 18:48 | 4523211 negative rates
negative rates's picture

Consequences bitches!

Fri, 03/07/2014 - 20:05 | 4523436 The Gooch
The Gooch's picture

Pirates, too.

Go! Go ye chosen ones to your sacred Islands!

 

Fri, 03/07/2014 - 18:33 | 4523143 earleflorida
earleflorida's picture

pure unadulterated 21st century feudalism-- back to the future?

and a raise in minimum wage shall cost you your job (head)?

Fri, 03/07/2014 - 18:36 | 4523159 USA USA
USA USA's picture

God Save The Queen.....or whoever

Fri, 03/07/2014 - 18:37 | 4523164 squid427
squid427's picture

A little Friday humor

A communist, a muslim, and an illegal immigrant walk into a bar.

Bartender says "What can I get for you Mr. President?"

Fri, 03/07/2014 - 18:43 | 4523183 Cattender
Cattender's picture

i get it.. LOL!!!!

Fri, 03/07/2014 - 18:43 | 4523187 NOTaREALmerican
NOTaREALmerican's picture

Here's another:

An Elysium Class member living off of Big-MIC, a Red Team (R)etard, and a Blue Team (D)umbass are sitting at the table. A taxpayer brings in 12 cookies. The Big-MIC scammer takes 11 cookies, looks at the (R)etard and say: Better watch that (D)umbass, he wants half your cookie.

Lesson learned:

(R)etard: Demand taxes be cut by 1 cookie leaving the (R)etard and (D)umbass with none. Elysium Class win.
(D)umbass: Get more cookies from the Taxpayer so the (R)etard and (D)umbass will get two, the Elysium Class get 22. Elysium Class win.

Fri, 03/07/2014 - 18:49 | 4523215 negative rates
negative rates's picture

Still amusing consequences coming bitches!

Fri, 03/07/2014 - 19:08 | 4523264 skwid vacuous
skwid vacuous's picture

never gets old... cheney and rumsfeld walk into a bar, bartenders says welcome to hell, now about those million dead brown colored kids...

Fri, 03/07/2014 - 18:45 | 4523196 Peter Pan
Peter Pan's picture

I think you got clobbered because it is an old joke. I will give you an up arrow just so you don't give up telling jokes.

Here is another from me:

Friend A: How have you been?

Fruend B: My sex life is like a Ferarri

friend A: That's great

friend B: the only problem is I don't have a Ferarri.

Fri, 03/07/2014 - 18:45 | 4523198 Herd Redirectio...
Herd Redirection Committee's picture

Thats good, except the whole Muslim Kenyan  red herring is to throw one off his Chi-town Commie roots.

Fri, 03/07/2014 - 18:40 | 4523174 Peter Pan
Peter Pan's picture

Perhaps that other coke which is sold on the streets has not outrun the dollar's value. Can anyone tell me?

Fri, 03/07/2014 - 18:42 | 4523180 RaceToTheBottom
RaceToTheBottom's picture

Plus all those WS Fucks telling you that the 3% their fund made you is real profit.  Debt based mirrors to facilitate the fake view that a debt based system grows faster than a PM based system

Fri, 03/07/2014 - 18:43 | 4523184 keating
keating's picture

The CPI is a very accurate measure, compare with http://bpp.mit.edu/usa/ and you can see they track closely, and their aggregate effect is fairly close.

Fiat currency being devalued is universal. Very few fiat currencies hold their value. The only advantage of pegging a currency to a commodity is to instill discipline in the government budget of the owner of the currency. Without this discipline, it is too tempting to print a massive budget buster.

It may be difficult to prosper but not unherad of. Norway has a surplus budget, a 42% tax bite because it is a welfare state, but inflation of .7% and 3.2 % unemplyment. So, if someone says it can't be done, you replay,"Nei, gjør Norge det veldig godt. Du er bare ond og lat."

Fri, 03/07/2014 - 19:00 | 4523250 NotApplicable
NotApplicable's picture

Oooh, this sock-puppet has NINE WHOLE POSTS in almost four years.

Soros must be paying you the big bucks for that level of productivity.

Fri, 03/07/2014 - 22:51 | 4523933 BooMushroom
BooMushroom's picture

Tell everyone in the Middle East that if they walk to Norway, they can get $60,000 a year in cash and prizes, tax free, for the rest of their lives.

You can have a welfare state, or open borders, but not both.

Fri, 03/07/2014 - 18:46 | 4523202 eddiebe
eddiebe's picture

And all we ever do about it is bitch. 

Fri, 03/07/2014 - 18:48 | 4523213 NOTaREALmerican
NOTaREALmerican's picture

Re:  And all we ever do about it is bitch. 

Well,  most people know the Elysium Class deserve all that loot because they are very smart, and someday their kids will have a chance at being members of the Elysium Class as long as they go to college and take out a loan with my TBTF financial institution.

Fri, 03/07/2014 - 18:49 | 4523218 negative rates
negative rates's picture

Consequences bitches.

Fri, 03/07/2014 - 19:01 | 4523253 Big Brother
Big Brother's picture

Did you ever notice in the movie "Elysium" that the people on Elysium looked rather Norweigian?  I mean, until you hear them speak...  Could be an accurate prediction? -Just tryin' to tie things together.

Fri, 03/07/2014 - 19:10 | 4523278 NOTaREALmerican
NOTaREALmerican's picture

Re:  Did you ever notice in the movie "Elysium" that the people on Elysium looked rather Norweigian?

I never saw the movie but it does seems the real Elysium Class is global and nationless.    They can live wherever they get the best deal which is basically which country has the easiest politicians to buy.  

Fri, 03/07/2014 - 19:25 | 4523309 Big Brother
Big Brother's picture

the real Elysium Class is global and nationless.  -Yes.  Once you get to certain net worth (of which I do not know), it becomes prudent to seek tax havens wherever they may be.

Not to give away the plot, but the futuristic setting portrayed by Neill Blumkamp shows that the best deal in the future is in space.

Fri, 03/07/2014 - 18:46 | 4523205 keating
keating's picture

@Race is correct. The only accurate measure of return is after all commission expenses, and after all inflation. You need to consider the transaction cost of selling an asset for cash. If you invest in jewelry, you take a 30% hit if you sell it to a dealer.

 

Fri, 03/07/2014 - 19:02 | 4523249 Atomizer
Atomizer's picture

Equiities market is steady as she goes. The old trick is to slowly lower dollar index. During Bush II years, we hit 70.3.

When the Greenspan lie surfaced. Lehman Brothers and Bear Sterns collapsed. AIG was bailed out to coffer new infusion of moneys to support weak Ponzi shell businesses. New money laundering schemes must be maintained to keep the seeing eye illusion alive. The repeat of the same lies can no longer be contained.

 

Fri, 03/07/2014 - 19:12 | 4523284 NOTaREALmerican
NOTaREALmerican's picture

Re: The repeat of the same lies can no longer be contained.

I donno..   The dumbasses aren't any smarter.

"Those people", global warming, godless commies,  proper usage of the genitals, fornicating harlots, ...  Not very hard to bullshit the dumbasses.

Fri, 03/07/2014 - 19:10 | 4523279 Shed Boy
Shed Boy's picture

pppffff.thats nuthin. I'm 57 and remember buying comic books for 12 cents. what are they now? $2.00? $2.50?

Fri, 03/07/2014 - 19:29 | 4523282 TheObsoleteMan
TheObsoleteMan's picture

If you think these prices have increased, look at the prices of items which are gubmint subsidized like infant formula. I remember paying $1.69 for a large can back in 1982. Since then, the gubmint started this thing called the "WIC" program, which pays for formula. The same can now cost over $20!! I remember back in the late 1960s when I was a kid, my dad used to give me a dollar on Saturday mornings {provided I had been good}. With that dollar, I was gone all day, buying all the candy, pop and comic books I wanted {pop and comics were 15 cents apiece, and candy was anywhere from one cent to 10 cents}. Shortly after this time, Nixon took us off the gold standard, and a dollar wasn't buying all the things it used to buy. That was when I started to go around to the neighbors, and ask them if they needed anything done like their grass cut, garage painted, etc. Just sayin'.

Fri, 03/07/2014 - 19:20 | 4523293 cynicalskeptic
cynicalskeptic's picture

Inflation is good for DEBTORS (or at least SOME debtors)

 The 'free silver' movement at the end of the 19th century was pushed by farmers who owed money to banks for mortgages on land and loans for seed and supplies - with inflation they collected maket (inflated) prices on what they produced and could pay off their debt with inflated money.  But this is one of the rare cases where INCOME keep pace with inflation.  This is one of the reasons commodities do well in preserving value during periods of inflation.  

This is why BANKS opposed the 'free silver' movement.  They held stocks of gold whic remained relatively constant compared to the size of the economy while silver supplies had exploded with the Comstock finds in Nevada.  Following Gresham's law, (relatively) cheaper silver was exchanged at the fixed rate for gold until the 'Crime of 1873'  (Coinage Act of 1873) which demonetized silver.  (Ironic in the long run as silver seems to be scarcer than gold now - demonetized, it was consumed by industry at discount prices).

HOWEVER, if you are a wage earner, it is rare for your wages to keep up with inflation.  Your employer will try and limit THEIR costs so YOUR wages will lag the rate of inflation.

If you are a SAVER you are screwed by inflation.

In the past BANKS held capital and earned interest on bonds.  Banks were therefore OPPONENTS of inflation in the past.  This is why banks opposed the free silver movement.  Inflation devalued the capital reserves held by banks, made the loans they had outstanding worth less in real terms and generally, COST the banks money.

In the past GOVERNMENT actually lived more within its means and had far less debt.  It benefitted from inflation as a debtor BUT was limited by law in the creation of more 'money' - Government issued ONLY gold and silver coins before the creation of the Fed.

 Individual banks were responsible for issuing bank notes before the creation of the Fed.  You needed more gold in your vaults before you could print more money (this was before The Fed when banks printed their own bank notes (even the 'National' Bank Notes printed post Civil War under the auspices of the Treasury were issued by individual banks).

Today GOVERNMENT EMBRACES and PROMOTES inflation.  Government is the biggest debtor out there and beenfits immensely from inflation AS LONG AS GOVERNMENT CAN KEEP THE INTEREST ON ITS DEBT BELOW THE REAL INFLATION RATE.  Hence the endless money creation and ZIRP forever.

And while banks can still be hurt by inflation, they are hurt MORE if the current financial system has to start paying off all the debts outstanding and collapses.

The current financial system is a PONZI scheme that DEPENDS on issuing more and more debt.  Without MORE debt it cannot even pay the interest it owes on its CURRENT debt.  

Inflation is the ONLY tool left that can reduce that debt.

SO, Government today wants inflation for the same reason that farmers in the late 1800's wanted inflation - it makes debts cheaper to pay off, although I don't see how it will EVER be possible to pay off the current debt outstanding unless you have hyperinflation which will be the same as a default.  It's easy to pay off TRILLIONS when a loaf of bread costs BILLIONS.


Keep in mind that even if you find a way to keep up with inflation, or even beat it, GOVERNEMNT will TAKE A CUT.  Hell you can still FALL BEHIND the rate of inflation but if you sell for more than you buy you owe CAPITAL GAINS TAXES.

SO... government can owe a fortune they can never pay off but they will collect taxes from you no matter what.  

Inflation reduces government debt but INCREASES their tax collections. 


Fri, 03/07/2014 - 19:42 | 4523370 Blue Vervain
Blue Vervain's picture

~ Excellent explanation from cynicsceptic - the heart of the matter in 15 paragraphs. ~

Sat, 03/08/2014 - 10:13 | 4524721 Cloud9.5
Cloud9.5's picture

There were a lot of green backs in circuation after the Civil War.

Fri, 03/07/2014 - 19:23 | 4523303 tahoebumsmith
tahoebumsmith's picture

Just wait until the Cali drought prices hit the shelves this summer! I'm talking mega disaster...Yeah we have had some rain but nowhere near what we need to turn this around. Just came over Echo Summit from South Lake and the ground is brown!!! We are expecting highs near 80 next week with no rain in sight. Anything we gained will be gone in a blink of an eye. Remember California produces over 70% of America's fruits and vegetables... The drought headlines have only just begun...

Fri, 03/07/2014 - 19:34 | 4523342 TheObsoleteMan
TheObsoleteMan's picture

Your right, California produces 70% of the country's fruits and nuts. Massachusettes, New York and New Jersey produce the other 30%.

Fri, 03/07/2014 - 19:41 | 4523366 yogibear
yogibear's picture

King dollar is becoming Krap dollar with the Fed's constant devaluing.

Fri, 03/07/2014 - 19:43 | 4523369 Duc888
Duc888's picture

 

 

An inflation rate of 2% is not price stability.

 

Correctamundo, it's normally referred to as theft.

 

In this world, you have producers, and everyone else (leechfucks).  What side are the banksters and politicians on?

Fri, 03/07/2014 - 19:42 | 4523372 TheObsoleteMan
TheObsoleteMan's picture

On an related note {inflation} consider this: I am old enough to remember when you could put aside a portion out of your wage to "save up" for a high ticket item. Try doing that today. You'll never make it, as the price hikes of the item you are trying to acquire will outpace your savings ability. That is where your friendly banker steps in, and loans you the money at interest, which you used to be able to buy without it {interest}. See how the con is run?

Fri, 03/07/2014 - 19:49 | 4523390 LooseLee
LooseLee's picture

Ha, IDIOTS like ThisRideNeverEnds cannot compute these things....

Fri, 03/07/2014 - 19:52 | 4523400 Duc888
Duc888's picture

 

 

Inflation: 1994 a pint of Ducati yellow Dupont Chroma Premier was $26

 

Fast forward to today, and the same pint is $122 a pint, my cost.  Petrochemical products are a beyotch.  For the math challenged, that's $1000 a gallon for yellow paint.

 

Nope, no inflation here....move along folks....nuthin' to see here.

Fri, 03/07/2014 - 20:02 | 4523428 maxamus
maxamus's picture

But I can cherry pick a bunch of items that are far cheaper today than years ago.

Fri, 03/07/2014 - 20:04 | 4523434 sparkydoodle
sparkydoodle's picture

And I was mocked when I filled my basement with canned cola!

who's laughin' now, bitches? 

mmmmmwwwwahahahahahaha

Sat, 03/08/2014 - 11:55 | 4524939 machineh
machineh's picture

'I needed a caffeine jolt late this morning after the long journey up from South America.'

Who is Juan Galt?

Stay thirsty, my friends!

Fri, 03/07/2014 - 20:16 | 4523460 JailBanksters
JailBanksters's picture

Inflation of any size only benefits speculators that are gambling your money on what something is going to cost in the future.

And by speculators, I mean Banks, and by banks I mean the 1% of the 1%

If you could expand the money supply as productivy increased, there no reason why inflation could not be 0%.

But what is happening is the Money supply is increasing while productivity is decreasing to support a increase in inflation. It's totally arsed about for the benefit of the Bankers. And of course the GDP is increasing not because of productivty but because of a Increasing Money Supply.

 

Fri, 03/07/2014 - 20:26 | 4523487 DerdyBulls
DerdyBulls's picture

Could someone source inflation for me besides the farm dealer or grocery isle?

Fri, 03/07/2014 - 20:49 | 4523573 DerdyBulls
DerdyBulls's picture

Except for government spending, how is the increased money supply getting into the general economy, thereby increasing demand for goods and services. Who is borrowing besides government generally speaking?

Oh, and who will lend besides the FED to treasury? I want to call them.

Fri, 03/07/2014 - 20:53 | 4523589 DerdyBulls
DerdyBulls's picture

And when the money is spent by treasury and ends up in a commercial bank, where do they park it? Or, are they lending to businesses? I like to know. I'm a business owner.

Yes, inflation will come because of the idiotic decisions being made but besides pockets here and there and anecdotal references where is it, REALLY?

Sat, 03/08/2014 - 02:24 | 4524371 Dr. Sandi
Dr. Sandi's picture

It's out buying the stock market, the commodities market, anything that can be 'legally' bet on. That's why the prices are going ballistic in said places.

Sat, 03/08/2014 - 09:00 | 4524638 DerdyBulls
DerdyBulls's picture
Commodity 1 Month Change 12 Month Change Year to Date Change Commodity Agricultural Raw Materials Index -0.84 % 4.30 % 0.00 % Commodity Beverage Price Index 0.95 % -2.40 % 0.00 % Commodity Price Index -2.17 % -4.02 % 0.00 % Commodity Fuel (energy) Index -2.72 % -2.83 % 0.00 % Commodity Food and Beverage Price Index -0.87 % -5.28 % 0.00 % Commodity Food Price Index -1.05 % -5.54 % 0.00 % Commodity Industrial Inputs Price Index -1.28 % -7.29 % 0.00 % Commodity Metals Price Index -1.54 % -12.82 % 0.00 % Commodity Non-Fuel Price Index -1.07 % -6.26 % 0.00 % Crude Oil (petroleum), Price index -3.09 % -2.70 % 0.00 % Coal, Australian thermal coal -3.23 % -12.03 % 0.00 % Coal, South African export price -2.03 % -3.75 % 0.00 % Crude Oil (petroleum) -3.07 % -2.66 % 0.00 % Crude Oil (petroleum); Dated Brent -2.77 % -4.75 % 0.00 % Crude Oil (petroleum); Dubai Fateh -3.47 % -3.12 % 0.00 % Crude Oil (petroleum); West Texas Intermediate -2.96 % 0.37 % 0.00 % Diesel 2.36 % 0.45 % 0.00 % Gasoline -2.34 % -6.31 % 0.00 % Heating Oil 0.99 % -0.16 % 0.00 % Indonesian Liquified Natural Gas 0.00 % -3.04 % 0.00 % Jet Fuel -1.15 % -5.50 % 0.00 % Natural Gas 16.95 % 47.15 % 0.00 % Propane 9.41 % 66.47 % 0.00 % RBOB Gasoline -2.12 % -9.38 % 0.00 % Russian Natural Gas -0.82 % -4.30 % 0.00 % Cocoa beans -0.18 % 23.91 % 0.00 % Coffee, Other Mild Arabicas 6.54 % -14.68 % 0.00 % Coffee, Robusta -2.69 % -12.16 % 0.00 % Tea 1.35 % -26.52 % 0.00 % Barley 3.97 % -31.40 % 0.00 % Canadian Wheat       Maize (corn) 0.62 % -34.48 % 0.00 % Rice -1.45 % -23.08 % 0.00 % Soft Red Winter Wheat -7.68 % -20.21 % 0.00 % Sorghum 4.78 % -25.87 % 0.00 % Wheat -5.50 % -17.87 % 0.00 % Bananas 0.33 % -0.58 % 0.00 % Oranges 0.00 % -1.34 % 0.00 % Beef 0.81 % -4.06 % 0.00 % Poultry (chicken) 0.14 % 5.33 % 0.00 % Lamb 0.50 % 28.33 % 0.00 % Swine (pork) 0.36 % -4.76 % 0.00 % Fish (salmon) 1.90 % 28.96 % 0.00 % Shrimp 0.00 % 57.37 % 0.00 % Sugar -6.03 % -18.20 % 0.00 % Sugar, European import price 0.59 % 3.16 % 0.00 % Sugar, U.S. import price 0.68 % -8.41 % 0.00 % Coconut Oil 0.08 % 53.20 % 0.00 % Fishmeal 1.87 % -24.06 % 0.00 % Olive Oil, extra virgin 0.42 % -8.48 % 0.00 % Palm Kernel Oil 1.40 % 45.79 % 0.00 % Palm oil -3.26 % -0.93 % 0.00 % Peanut Oil -5.56 % -32.86 % 0.00 % Groundnuts (peanuts) 9.85 % 22.13 % 0.00 % Rapeseed Oil -5.54 % -21.22 % 0.00 % Soybean Meal -4.29 % 3.71 % 0.00 % Soybean Oil -4.71 % -25.96 % 0.00 % Soybeans -2.57 % -9.50 % 0.00 % Sunflower oil -5.05 % -26.33 % 0.00 % Coarse Wool -2.58 % -9.81 % 0.00 % Copra 0.24 % 53.07 % 0.00 % Cotton 3.97 % 6.37 % 0.00 % Fine Wool -4.25 % -17.38 % 0.00 % Hard Logs -0.26 % -14.22 % 0.00 % Hard Sawnwood 0.55 % 3.12 % 0.00 % Hides -0.52 % 21.74 % 0.00 % Plywood -0.26 % -14.22 % 0.00 % Rubber -9.07 % -29.58 % 0.00 % Soft Logs 0.00 % 20.32 % 0.00 % Soft Sawnwood 0.00 % 7.66 % 0.00 % Wood Pulp -0.57 % 11.34 % 0.00 % Aluminum -0.71 % -15.22 % 0.00 % Cold-rolled steel       Copper, grade A cathode 1.06 % -9.46 % 0.00 % Gold 1.62 % -25.58 % 0.00 % Hot-rolled steel       Iron Ore -5.65 % -14.86 % 0.00 % Lead 0.30 % -8.19 % 0.00 % Nickel 1.27 % -19.39 % 0.00 % Rebar       Silver 1.38 % -36.03 % 0.00 % Steel wire rod       Tin -3.07 % -10.31 % 0.00 % Uranium 1.42 % -17.89 % 0.00 % Zinc 3.14 % 0.27 % 0.00 % DAP fertilizer 18.50 % -9.63 % 0.00 % Potassium Chloride -2.71 % -18.23 % 0.00 % Rock Phosphate 1.19 % -42.91 % 0.00 % Triple Superphosphate 7.78 % -25.98 % 0.00 % Urea 6.81 % -10.37 % 0.00 %
Sat, 03/08/2014 - 09:48 | 4524691 DerdyBulls
DerdyBulls's picture

Sorry, chart messed up. I messed up. New around here.

Sat, 03/08/2014 - 20:22 | 4526260 sparkydoodle
sparkydoodle's picture

Second door on the right

Sat, 03/08/2014 - 01:23 | 4524307 studfinder
studfinder's picture

I think something to look at for us homeowners is property taxes and homeowners insurance.  I know my mom would know this, but i'm pretty sure both of those have skyrocketed in the past decade here.  Could throw in auto insurance, health insurance along with car registration..

Sat, 03/08/2014 - 13:19 | 4525113 hootowl
hootowl's picture

Derdybulls;  Debt-money.

 

Fri, 03/07/2014 - 20:53 | 4523588 omi
omi's picture

But you damn bitches aren't making 50 cents an hour either. So stop comlpaining and develop skills then you can make a larger improvement in your hourly rate than inflation.

Remember: when in doubt, don't complain but shut the fuck up instead!

Fri, 03/07/2014 - 21:03 | 4523613 DerdyBulls
DerdyBulls's picture

I want to know a solid basis for the complaint. Inflation IS a grand theft. In mass inflation the skill augmentation argument breaks down.

Fri, 03/07/2014 - 23:14 | 4524010 plane jain
plane jain's picture

In 1988 minimum wage was $4.25.  I remember because we were glad when it got bumped up from $3.35.

Fri, 03/07/2014 - 21:30 | 4523677 oooBooo
oooBooo's picture

Vending machine prices are very high but to just buy pop at the store it's probably as cheap as ever. The $0.99 two liter has been around for 25+ years now.

My guess the is that the vending machine is so much more expensive now because of the cost of keeping them filled, the cost of running them, the cost charged by whoever owns where they are located, etc and so on.

 

Sat, 03/08/2014 - 01:13 | 4524294 studfinder
studfinder's picture

In high school ('96) I remember going to McDonalds a few times at lunch and getting 2 big macs for 2 bucks...  Those would have been GMO free still at that point...  almost organic!    Today only God himself knows what they put in those things.  Also paid $.89/gallon for gasoline in the late 90's ...my first phone bill when i moved out in the late 90's was like $14  ...i know my mom finally got off her landline (!) in the last year and her bill was $50 (just phone).  Of course cellphones still hadn't made much of an entrance in the late 90's and the internet was 2400 baud on my first computer (mid 90's)...oh...and AOL charged by the minute!   ;) 

Its fun to talk to older folks about how things use to be.  The young (anyone under 25 at this point in my life) don't realize how good we once had it...  don't remember gas being so cheap, pound of burger being .99/lb, no cellphones, etc... 

Sat, 03/08/2014 - 14:43 | 4525308 withglee
withglee's picture

When I started my career in 1962, I could buy a gallon of gas for $0.25. I can still buy a gallon of gas with a 1962 quarter (90% silver), but first I must exchange it for 13 or our current quarter dollar slugs. Were things better then? I made $4,500 a year. Everything is relative. Actually, things are much cheaper today in real terms because of the amazing efficiencies that have been brought to bear on production and delivery. Financial criminals are more brazen and in the open now. In the olden days their machinations were largely invisible. The internet is our gift driving them into the open. Watch for them to aggressively attempt to snuff it out. That is a tall order though, because now all business is totally dependent on the internet for their operation.

Sat, 03/08/2014 - 14:26 | 4525282 withglee
withglee's picture

The proper amount of INFLATION is zero ... and it's trivial to achieve it.

Money is "a promise to complete a trade". This is obvious from examination of trade's three steps: (1) Negotiation; (2) Promise to deliver; (3) Delivery.

In simple barter, steps (2) and (3) happen simultaneously on the spot. Money allows (2) and (3) to happen over time and space.

In a properly managed Medium of Exchange (MOE), trading promises are "certified" and recorded. The certificates issued (money) circulate in barter trade and are guaranteed to hold their value (no increase or decrease in value) over all time and space. When the trading promise is delivered, the certificates are returned and extinguished. The supply and demand for certificates is always in perfect balance ... it's the nature of trade.

If the promise is not delivered, there is a DEFAULT. DEFAULTs leave the certificates circulating resulting in INFLATION. To mitigate this, an equal amount of INTEREST must be collected to recover the certificates. The governing relation is: INFLATION = DEFAULT - INTEREST and the mechanism guarantees zero INFLATION.

Any other mechanism is bogus. Cui bono to see why we have never had perpetual zero inflation.

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